Warner Bros. Pictures, Inc. v. Lawton-Byrne-Bruner Ins. Agency Co.

79 F.2d 804, 1935 U.S. App. LEXIS 4272
CourtCourt of Appeals for the Eighth Circuit
DecidedOctober 31, 1935
Docket10272, 10273
StatusPublished
Cited by14 cases

This text of 79 F.2d 804 (Warner Bros. Pictures, Inc. v. Lawton-Byrne-Bruner Ins. Agency Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Warner Bros. Pictures, Inc. v. Lawton-Byrne-Bruner Ins. Agency Co., 79 F.2d 804, 1935 U.S. App. LEXIS 4272 (8th Cir. 1935).

Opinion

STONE, Circuit Judge.

On April 20, 1925, the Central Properties Corporation made its deed of trust and chattel mortgage to secure bonds of the paxvalue of $4,500,000. The deed of trust covered two tracts of land and buildings thereon in St. Louis, Mo. — called herein, respectively, the-Grand Central and the Ambassador properties. The Ambassador property consisted of a 17-story downtown office building containing a large (3,000 seats) moving pictxxre theater — the bxxilding being on two adjoining tracts of land of which one was owned and the other under 99-year lease expiring in 2006. The Grand Central property consisted of a 2-story moving picture theater building (1,700 seats) outside the downtown district — the building being on two adjoining tracts of land held under separate 99-year leases, both expiring hi 2011. This deed of trust and chattel mortgage were a first lien on the property.

On January 15, 1928, the St. Louis Properties Corporation made its deed of trust and chattel mortgage to secure bonds of the par value of $2,000,000. The deed of trust covered a building and tract of land in St. Louis — sometimes called herein the Missouri property. This consisted of a 12-story office building containing a large (3,-800 seats) moving picture theater on a tract owned by the company located outside the downtown district.

After the St. Louis Properties Corporation had acquired the above property of the Central Properties Corporation, it made two successive deeds of trust covering all of the above properties. The first of these was executed January 15, 1928, to secure par bonds for $850,000 and created a second lien on all the above three properties. The second was executed on February 1, 1928, to secure par bonds for $1,000,000 and created a third lien on the three properties.

*807 The business of the St. Louis Properties Corporation was the management of these two office buildings and these three theaters.

August 19, 1932, a creditor’s bill was filed, against the St. Louis Properties Corporation; it answered confessing the allegations of the bill, and a receiver for all of the above properties was appointed and thereafter qualified. Later, foreclosure hills -were filed under each of the two above first mortgages and the second mortgage; these were Consolidated with the creditor’s suit and the receivership extended to cover the four consolidated actions. On December 28, 1933, foreclosure decrees were entered covering the two first mortgages and ordering sales thereunder.

Among the provisions of each of these-decrees were the following: That bidders must qualify by depositing with the master conducting the sale a specified amount of casi: or of bonds under the mortgage covered by the sale; that the successful bidder might (beyond certain cash payments to cover costs, expenses, etc., of the foreclosure) make payment for the property in bonds covered by the particular mortgage; that, if the property was to be bid in for reorganization, the plan of reorganization must be filed, objections might be filed thereto, and the court would determine the fairness of any plan; that jurisdiction was reserved “to enter a personal deficiency decree against the defendants, or any or either of them, who may be personally liable therefor.”

On March 26, 1934, a bondholders’ committee under the two first mortgages and a similar committee under the second mortgage asked leave to intervene claiming deposits of bonds as follows: About 75 per cent, under Central Properties first mortgage; about 68 per cent, under St. Louis Properties first mortgage; and about 80 per cent, under St. Louis Properties second mortgage. The application for leave ends:

“Your petitioners attach hereto a petition for instructions and directions which they desire to file in this proceeding, and respectfully pray that the Court enter an order herein granting them leave to intervene for the purposes set forth in said petition.”

But this petition is not in the record.

On March 30, 1934, Warner Bros. Pictures, Inc., asked leave to intervene by a petition attached thereto. This petition set out that it had (March 8, 1934) submitted to the committee representing the two first mortgages bonds plans covering “refinancing” of the property under each of the mortgages (copies being attached to the petition), but that, “notwithstanding the submission of said plans,” the committee had (on March 22, 1934) mailed to its bond depositors “notices of the adoption and filing of plans of reorganization * * * and a summary of such plans showing plans entirely different from those submitted by this intervener” and without informing such bondholders that intervener had submitted plans or that any plans other than submitted by the committee were available to the bondholders; that intervener’s said plans were of substantial merit and, if submitted to the depositing bondholders, would be largely approved by them; that, in denying such bondholders the opportunity to choose between such plans, the committee was acting “in a manner prejudicial to the best interests” of such bondholders. The prayer of the petition was for disapproval of the committee plan, for rescission of the committee proposal for ratification until the plan had been approved by the court, Cor approval of the plans submitted by intervener, for instructions to the committee to forego sending any plan to any bondholder “without the consent of the court,” and for general relief.

On April 2, 1934, Mrs. F. Geller and other individuals asked leave to intervene. Nine were separate holders of various amounts (a total of $138,400) of Central Properties first mortgage bonds on deposit with the committee of which T. J. Martin held $104,000; one (T. J. Martin) was holder of an undisclosed amount of St. Louis Properties first mortgage bonds on deposit with the committee; and another (Philip J. Raff) held $36,200 of Central Properties first mortgage bonds not deposited and $27,000 of St Louis Properties first mortgage bonds not deposited. The Martin and Raff holdings were as agents of Warner Bros. Pictures, Inc. Petitioners desired to intervene to protect their interests in any reorganization plan and to oppose the committee plan. The attached proposed intervening petition set out numerous objections to the committee plans.

On April 23, 1934, the court denied the above applications to intervene by Warner Bros. Pictures, Inc., and by Mrs. Geller et al. on the grounds that they were premature and presented matters which the court *808 would, at the proper time, consider without such interventions. May 1, 1934, an order was made requiring the committees for the two First Mortgages Bonds to send summaries of their plans to all first mortgages bondholders known to them and to extend deposit date with committees to May 20.

June 7, 1934, sales were held under the two above foreclosure decrees. The properties under both sales were bought by Thomas N. Dysart for the respective First Mortgage Committees. The following day he filed (in compliance with the foreclosure decrees) separate reorganization plans for the properties bought under each sale. The same day, the master filed his reports on the sales. In the report of sale under the Central Properties mortgage, he stated that the only bidders qualifying were Thomas N. Dysart (acting for the bondholders’ committee of that mortgage) and Sam B. Jeffries, and that the only bids were $1,-000,000 by Mr.

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Cite This Page — Counsel Stack

Bluebook (online)
79 F.2d 804, 1935 U.S. App. LEXIS 4272, Counsel Stack Legal Research, https://law.counselstack.com/opinion/warner-bros-pictures-inc-v-lawton-byrne-bruner-ins-agency-co-ca8-1935.